Wage Calculation Confusion: How to Pay Unskilled Workers for a 31-Day Month?

Respected Seniors and fellow HR professionals,

I request you all to kindly provide clarity on my assumptions:

Understanding Wage Calculation under CLRA

Under CLRA (Regulation & Abolition), 26 days are assumed to be working in a month with 4 days of unpaid weekly rest. We pay outsourced staff INR 14,842 for the unskilled category in Delhi state.

Wage Calculation for a 31-Day Month

For a month comprising 31 days, should it be assumed that the same wages will be payable for 27 days, including 4 rest days for unskilled workers? Consequently, if a worker works 26 days in such a month, should they only get paid for 26 days' wages, as they would for a month of 30 days?

Please provide your insights.

Outsourced staff payment methods

Outsourced staff in the unskilled category shall probably be on a daily-rated (DR) basis. In such a scenario, where is the question of making it on a monthly-rated (MR) basis?

If they are monthly rated, you can adopt the method as illustrated by you, based on a 26/27 days basis. However, there is a month where 5 weekly offs are available. In the month of February, you have to calculate using the same method, depending on the number of working days.

Sir, we have housekeeping staff deployed in our hospital. It's not just about Sundays in healthcare; we adhere to the rule of providing 4 weekly rest days for this category of staff.

Calculating Wages for Housekeeping Staff

So, how should we calculate their wages if the current method mentioned above is not correct? How should we proceed with this issue considering the contractor pays these workers only at the end of the month?

Alternative Wage Computation Approach

What alternative approach can we take to compute the wages? The daily minimum wage for the unskilled category is 14,842/-. If we divide the monthly wage by 26, we get a daily wage of 571/-. However, what should be assumed when a month consists of 31 days?

Minimum Wage Calculation

The minimum wages are computed by the government machinery as monthly wages, and the daily wage is derived by dividing it by the standard month of 26 days. The daily wage so derived (Rs. 570.85) is rounded off to Rs. 571.

When calculating the monthly wages for 26 or even 27 days, the amount should be Rs. 14,842. Therefore, there is no need to multiply Rs. 571 by 27 days, as it would result in Rs. 15,417, indicating an excess payment of Rs. 575. If the decision is made to limit the payment to Rs. 14,842, then there is nothing illegal.

Wage Deduction for Absence

In the case of a 27-day month (like the current month of July 20) and the employee is absent or on leave without pay for, say, 1 day, then the deduction could be based on the daily wage notified by the government for one day (Rs. 571). It follows that in February, when the employee works for 23/24 days, they receive a full salary for the month.

Hope the above clarifies.

Understanding Wage Calculations Under the Minimum Wages Act

Standard wages as per the Minimum Wages Act and the CL Act are calculated based on a month's working days, excluding the weekly off. For example, if a month has 26 working days with Sundays as the weekly off, then the salary amount X is divided by 26 days to determine the per-day rate. Similarly, if the working days are 27 days, then it's X/27 to calculate the per-day salary. Thus, X remains constant. Calculating the actual attendance multiplied by the per-day rate will give the monthly earned salary.

Overtime and National Holidays

For each extra day beyond the standard working days, overtime (OT) will be considered at double the rate of wages. Additionally, national holidays are paid holidays and earn the extra day's salary for the employee.